Feature – Make homeworking a success

In summary

Historically, homeworking was great for employers because it allowed them to reduce their office costs, but now there are other reasons for allowing your staff to work at home too. Staff retention, productivity and efficiency can all be improved by home working, as long as there’s support on hand when needed and staff are offered progression as they would be in the office. Case study: The AA

Article in full

Employees who work from home, claim to have a better quality of life and be more productive. Initially, employers which offer staff the option to work from home, did so to reduce their office-related overheads. But, with the advance of flexible working practices, they are now implementing homeworking schemes for many different reasons. Official government statistics show that the number of homeworkers has doubled in the six years since its measurement was incorporated into the ONS’s quarterly Labour Force Survey. The total has grown from 1.01 million employees in 1997 to 2.113 million or just over 7.5% of the UK workforce. While growth in some years has been as high as 20%, in 2003 it averaged around 12%.

Alan Denbigh, executive director of the Telework Association, says: “The cost effectiveness of homeworking depends on how it is implemented. Done well, both the employer and the employees stand to gain considerably. Done badly, it can be [something of a] disaster.” It is rarely an all-or-nothing scenario. In many cases, employees work on a split week basis, for example, spending three days in the office and two days at home, rather than on a full-time arrangement. From the employer’s perspective, this does not appear to present as many cost-saving opportunities as staff working from home full-time, thus saving on office overheads. “This really illustrates how the business case for homeworking has changed.

A few years ago, companies encouraged it for the space and equipment cost-saving potential. Now the cost savings are more attuned to things like staff retention and flexible working,” says Denbigh. In order to work successfully the arrangement must be of benefit to both the organisation and the homeworker, with both parties understanding their responsibilities from the outset. Rebecca Clake, adviser, organisation and resourcing, at the Chartered Institute of Personnel and Development (CIPD), says: “First and foremost, the employer needs to ensure that people have the skills and motivation to work productively in that environment, otherwise neither party will benefit.”

Employers are expected to supply equipment such as computers; telephones and line rental; desks and peripheral equipment such as fax machines, special software and printers. But there are no set rules on the issue of who pays for running costs such as heating and lighting. “Some organisations take the view that homeworking is a matter of choice and expect the employee to pay. The best advice to employees is to check with the Inland Revenue about what costs, if any, they can claim against tax because they are working from home,” says Clake. But employers have other costs to consider. Under existing health and safety legislation, employers are responsible for providing a safe working environment for staff.

This makes them legally responsibility for assessing the home workplace and any equipment staff will be using. The provision of support and ongoing training and career development are also essential for the long-term sustainability of homeworking. These should be equivalent to the training and career development opportunities offered to employees based in the traditional office environment. Stoke on Trent-based holiday firm Future Travel has just under 600 employees operating almost entirely on a homeworking system. Former sales operative Matthew Ruth is now the business development manager, and proof that staff development and career progression is possible for remote workers. “Thanks to the latest technology the company has made huge savings by employing people to work from home, but that hasn’t been at the expense of staff development. “We do stipulate that applicants have had a minimum of two years’ experience in the travel industry within the last five years, which reduces basic training costs, but every homeworker is assigned to a regional team leader and given a great deal of support.”

Homeworkers are entitled to receive a written statement of the particulars of their employment, including details of flexible hours of work, the provision of equipment by the employer, and specific arrangements that will allow an employer to meet its health and safety and insurance responsibilities. Under the terms of the Data Protection Act 1998, employers are also responsible for ensuring the protection of any data processed by homeworkers, so security measures to prevent visitors or any other members of the household from accessing personal data stored on the home computer should be in place.

Given the additional responsibilities that employers of homeworkers must shoulder, it may seem surprising that so many are prepared to facilitate the option. Many are thinking long-term, says the CIPD’s Clake. “With recent changes to legislation affecting employees’ rights to time off, employers can no longer afford not to be flexible.” Since 6 April 2003, parents of children under six, and parents with disabled children under 18, have had the legal right to ask their employer to consider flexible ways of working. From April 2007, meanwhile, new mothers will also benefit from nine months paid maternity leave, while new fathers will receive two weeks paid paternity leave for the first time. In light of this increased demand for flexible working, an efficient homeworking option for staff can pay dividends for everyone, including the organisation, in the long run. Telework Association’s Denbigh says: “The savings that employers can make offer longer-term benefits. The real key to successful and cost effective homeworking lies with the employer being absolutely clear about why they are doing it and communicating it fully to the staff.”

Employers’ guidelines

A new code of practice for organisations employing homeworkers was agreed last year. The guidance, produced by the Confederation of British Industry, Trades Union Congress, CEEP UK, and the Telework Association, covers the following issues: • Health and safety, such as ensuring all electrical equipment complies with safety regulations and a risk assessment of work is carried out. • Allowances, taxation and expenses, for example, allowing claims for attending team meetings or travelling to the office. • HR, such as recruitment, training and career progression. • Personal support, to ensure employees do not become isolated. • Information security. The guidance sets out legal requirements and examples of best practice. It aims to help employers and staff consider related issues and gives implementation tips. Access a copy at www.dti.gov.uk /er/individual/telework.pdf


Findings from the two-year EU-funded SusTel research project, one of the largest studies into homeworking ever undertaken, concluded that allowing staff to work from home could create significant benefits for staff and employers, but only where schemes are carefully implemented. The study found that homeworking generally resulted in improved work performance, reduced absenteeism, and improved recruitment and retention. In most cases, these offset additional costs such as home equipment. Homeworking also cut office costs considerably. However, poorly designed schemes can be financially negative. A free online assessment tool, available at www.sustel.org has been launched to enable employers to maximise the benefits of homeworking. Built on the findings of the research, the tool guides employers through the economic, social and environmental issues of implementing a homeworking scheme, and produces a final score identifying all areas where improvement is needed.


In 1997, the AA introduced a pilot homeworking scheme in the Leeds area involving just 10 people. While calls from motorists peak during the morning and evening rush hours, staffing for these periods did not naturally fall into one shift. The programme proved so successful that today the AA has 150 call handlers, based in Leeds, Newcastle and Cheadle, working entirely from home. Denise Raven, communications manager, says: “The company has gained on several fronts. Homeworkers are generally 30% more efficient according to the findings of our pilot study, and they can be so much more flexible from home. When the early morning and evening demand starts to peak, or we have an unexpected demand, we can have the extra call handlers we need in place almost immediately.” Staff retention has also improved, and where staff have relocated within their own region, the company has ensured that they have been able to take their job with them. “Although we can monitor all calls there is a big element of trust. If you can’t trust people at home, would you trust them in the office?” concludes Raven.